Forex Trade Idea: EUR/USD Fib Retracement Opportunity

It’s been a while since I traded EUR/USD, hasn’t it? Since my long-term GBP/USD trade is still brewing, I decided to look at EUR/USD for a possible short-term trade.

And it looks like we have a winner! Yesterday EUR/USD found support at the 1.2700 handle after a strong downward move. The pair is headed towards the 1.2800 handle, which is right around a 61.8% Fib, previous support area, and 100 SMA on the 1-hour time frame.

EUR/USD 1-Hour Forex Chart

The retracement setup is working for me because I haven’t changed my fundamental bias on the pair. The euro region is still popping up disappointing economic reports and Draghi is still adamant that we haven’t seen the last of the ECB’s stimulus arsenal. On the other side of the chart, the dollar is still as strong as ever, thanks to speculations that the Fed will raise its interest rates in early 2015.

I’m not too keen on entering at market, so I’ll probably be more patient and wait for an actual test of the Fib levels. If EUR/USD bears get their second wind earlier than expected and the pair doesn’t reach the 1.2800 area, then I’ll consider entering a short at new lows.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.

About Hucklekiwi Pip

“Huck loves her bucks!” I always say. The problem, of course, is how to make those bucks!! I'll be posting my adventures as I traverse the forex world, while trying to catch some pips along the way. To do this, I will make use of classical charting methods as well as develop my own mechanical system. Not only will I talk about FX, but I'll also share how my day went along with any currency trade updates. Hopefully, by the end of this tale, I'll be able to achieve my goal of becoming a consistently profitable foreign exchange trader.

We introduce people to the world of currency trading, and provide educational content to help them learn how to become profitable traders. We're also a community of traders that support each other on our daily trading journey.